eBay sellers - are you liable for tax?
Given the exponential growth of eBay and other auction sites, HM Revenue & Customs have taken note and have published a tax guide for "e-traders".
In a new guide, "Conditions for e-trader status" here, HMRC say that if you are "trading", this means that you provide goods or services to customers via an online site and they pay you in return.
The following is an extract from the site:
You are trading if:
- you sell goods that you bought for resale
- you make items yourself and sell them, intending to make a profit
- you sell or buy goods for other people and receive money for this (for example on commission), or
- you provide a service and receive payment (in cash or in kind).
If you don't think you are trading, or only sell occasional items, check whether you qualify as a non-trader.
You must register with HMRC within three months of starting your business, or you could pay a penalty.
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